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ASX LISTING RULES Guidance Note 16

ASX Listing Rules Guidance Note 16 1 May 2013

TRADING HALTS AND VOLUNTARY SUSPENSIONS

The purpose of this Guidance Note

• To assist listed entities to understand when and how to apply to ASX for a trading halt or voluntary suspension

The main points it covers

• How to apply to ASX for a trading halt under Listing Rule 17.1

• The effect of a trading halt

• When to apply for a trading halt

• Ending a trading halt

• How to apply to ASX for a voluntary suspension under Listing Rule 17.2

• The effect of a voluntary suspension

• When to apply for a voluntary suspension

• Ending a voluntary suspension

• The actions dual listed entities should be taking on overseas exchanges if they are granted a trading halt or voluntary suspension by ASX

• The difference between a trading halt requested by a listed entity under Listing Rule 17.1 and a halt to trading imposed by ASX on receipt of a market sensitive announcement

• The difference between a trading halt requested by a listed entity under Listing Rule 17.1 and a regulatory halt imposed by ASX

Related materials you should read

• Guidance Note 8 Continuous Disclosure: Listing Rules 3.1 – 3.1B

• Guidance Note 14 ASX Market Announcements Platform

History: Guidance Note 16 amended 01/05/13. Previous versions of this Guidance Note were issued in 11/98, 09/01, 03/03, 03/11 and 01/12.

Important notice: ASX has published this Guidance Note to assist listed entities to understand and comply with their obligations under the Listing Rules. Nothing in this Guidance Note necessarily binds ASX in the application of the Listing Rules in a particular case. In issuing this Guidance Note, ASX is not providing legal advice and listed entities should obtain their own advice from a qualified professional person in respect of their obligations. ASX may withdraw or replace this Guidance Note at any time without further notice to any person.



Table of contents

1. Introduction 2

2. The general principle ASX applies to requests for trading halts and voluntary suspensions 3

3. Trading halts 3 3.1 What is a trading halt? 3 3.2 The effect of a trading halt 4 3.3 When to ask for a trading halt 5 3.4 The procedure to ask for a trading halt 6 3.5 Notification of a trading halt 7 3.6 Ending a trading halt 7

4. Voluntary suspensions 8 4.1 What is a voluntary suspension? 8 4.2 The effect of a voluntary suspension 8 4.3 When to ask for a voluntary suspension 9 4.4 The procedure to ask for a voluntary suspension 10 4.5 Notification of a voluntary suspension 10 4.6 Ending a voluntary suspension 11

5. Dual listed entities 11

6. Halts imposed by ASX on receipt of market sensitive announcements 11

7. Regulatory halts imposed by ASX in cases of extreme trading 12

8. Continuing obligations 13

1. Introduction

This Guidance Note is published to assist entities and their advisers to understand when and how to apply to ASX for:

a trading halt under Listing Rule 17.1; or

a suspension of the entity’s securities from quotation under Listing Rule 17.2 (a “voluntary suspension”).1

A trading halt is a temporary break in trading which does not involve a formal suspension from quotation. It is a different process under the ASX Operating Rules, and has a different treatment in the ASX trading platform, to a suspension (whether voluntary or otherwise).

This Guidance Note explains how trading halts and voluntary suspensions operate in practice and the difference between them. It also explains the difference between a trading halt under Listing Rule 17.1 on the one hand and the temporary interruption to trading that is implemented by ASX when it receives a market sensitive announcement or there is extreme trading in an entity’s securities on the other.

Trading halts and voluntary suspensions are important mechanisms that listed entities can use to manage their continuous disclosure obligations under Listing Rules 3.1-3.1B. How and why this is so is explained in further detail in Guidance Note 8 Continuous Disclosure: Listing Rules 3.1 – 3.1B.

1 This is to be distinguished from a suspension of an entity’s securities imposed by ASX under Listing Rule 17.3 – an involuntary or ASX-imposed suspension.

Deleted: how:¶trading halts requested by an entity under Listing Rule 17.1;

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Deleted: operate in practice and to understand the difference between them. It also explains the difference between a trading halt under Listing Rule 17.1 and the temporary interruption to trading that is implemented by ASX when it receives a market sensitive announcement.¶

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Deleted: 2 The purpose and effect of those Listing Rules is to ensure that information that a reasonable person would expect to have a material effect on the price or value of an entity’s securities is released to the market in a timely manner, so that trading in those securities can take place on a reasonably informed basis. Continuing and widespread compliance with that rule is critical to the integrity and efficiency of the ASX market and other markets that trade in ASX-quoted securities or derivatives of those securities



2. The general principle ASX applies to requests for trading halts and voluntary suspensions

The general principle applied by ASX in considering requests for a trading halt or a voluntary suspension is that interruptions to trading should be kept to a minimum and, therefore, a trading halt or a voluntary suspension should only be permitted:

where there is a material risk that trading in a particular security might occur while the market as a whole is not reasonably informed; or

where it is needed to correct or prevent a false or disorderly market.

The application of a trading halt or voluntary suspension in these circumstances can often be beneficial for both the market and the entity. It will ensure that the entity’s securities are not trading on ASX and other licensed securities markets in Australia3 on an uninformed basis. It will also signal to investors that market sensitive information may be about to be released and that they should be wary of trading in, or entering into derivative transactions over, the entity’s securities off-market or on other trading venues. Both of these things may help to reduce the exposure of the entity and its officers to the legal and financial consequences that could follow if the entity is ultimately found to have breached its disclosure obligations, for example, under Listing Rule 3.1.4

3. Trading halts

3.1 What is a trading halt?

A ‘trading halt’ is defined in Listing Rule 19.12 as:

an interruption to trading at the request of an entity that is not a suspension from quotation.

Listing Rule 17.1 states:

ASX may grant a trading halt at the request of an entity. ASX may require the request to be in writing. ASX is not required to act on the entity’s request. The entity must tell ASX each of the following.

Its reasons for the trading halt.

How long it wants the trading halt to last.

The event it expects to happen that will end the trading halt.

That it is not aware of any reason why the trading halt should not be granted.

Any other information necessary to inform the market about the trading halt, or that ASX asks for.

17.1.1 The length of the trading halt cannot exceed the period permitted under ASX ’s Operating Rules.

17.1.2 ASX may suspend quotation of an entity’s securities, even if the securities are subject to a trading halt. However, if the entity requested the trading halt (without ASX’s intervention) to prevent trading in its securities taking place in an uninformed market, ASX will not suspend quotation of the securities before the expiry of the trading halt.

ASX Operating Rule 3301(b) empowers ASX to impose a trading halt in relation to a listed entity’s securities where the entity has requested it and ASX has agreed to the request under the Listing Rules.

ASX Operating Rule Procedure 3301 provides:

3 See ‘3.2 The effect of a trading halt’ and ‘4.2 The effect of a voluntary suspension’ on pages 4 and 9.

4 See Guidance Note 8 Continuous Disclosure: Listing Rules 3.1 – 3.1B.

Deleted: where there is a material risk that trading in a particular security

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Deleted: ASX Operating Rule 3301 states:¶A trading halt may be imposed by ASX in respect of Cash Market Products if:¶(a) ASX receives or releases an announcement in relation to an Issuer which, in the opinion of ASX, is market sensitive; or¶(b) an Issuer requests a trading halt and ASX agrees to impose a trading halt.¶The trading halt will end at the time specified in the Procedures.¶Cash Market Products the subject of a trading halt must not be traded (including by way of Crossings and Special Crossings) during the period of a trading halt. The way that Cash Market Products are dealt with during and at the end of a trading halt is specified in the Procedures.¶

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A trading halt will end at the earlier of:

(a) the time announced by ASX that the trading halt will end (and ASX will provide at least ten minutes notice before the end of the trading halt); or

(b) subject to paragraph (c) below (if applicable), the commencement of Open Session State on the second Trading Day after the day the trading halt is imposed; or

(c) if the trading halt is imposed after the end of that day’s CSPA Session State, the commencement of Open Session State on the third Trading Day after the trading halt is imposed.

When a trading halt ends, the Cash Market Products will be placed in the Session State applying to the relevant sector of the market unless ASX decides otherwise.

The “open session state” refers to the state that the ASX market platform operates in during normal trading, where overlapping buy orders and sell orders are matched in accordance with price/time priority. The “CSPA session state” refers to the state the ASX market platform operates in during the closing auction on a trading day.

Under Operating Rule Procedure 3301, therefore, the longest a trading halt can last is effectively two full trading days. It may in fact be less than two full trading days if the trading halt is put in place part-way through a trading day. For example, if the trading halt is put in place at any time before the close of trading on ASX on a Monday, the maximum period it can operate will be up to the commencement of trading on the following Wednesday (assuming the Monday, Tuesday and Wednesday are all trading days), regardless of whether it was put in place before trading started, or while trading was under way, on the Monday.6

3.2 The effect of a trading halt

When ASX agrees to a trading halt in an entity’s securities under Listing Rule 17.1, those securities are placed into the “trading halt session state” on the ASX market platform. In that state, ASX market participants are able to place orders for, but are not able to trade in, the securities. Existing orders for the securities in the ASX trading platform are not automatically purged, as they are in the case of a voluntary suspension, but instead remain in the trading platform with the same price/time priority and are available for execution when trading resumes after the halt has been lifted.7 ASX market participants are also able to amend or cancel their existing orders. This treatment reflects the fundamentally short-term nature of a trading halt compared to a voluntary suspension.

Under Part 6.1 of the ASIC Market Integrity Rules (Competition in Exchange Markets) 2011, whenever ASX places a security into, or takes it out of, a “trading suspension”, it is required to notify that action to all other licensed market operators in Australia who quote the security and they in turn are required to immediately take corresponding action to place the security into, or take it out of, a trading suspension. A “trading suspension” for these purposes includes a trading halt under Listing Rule 17.1.8

6 If the trading halt is put in place after the close of trading on ASX on the Monday, the maximum period it can operate will be up to the commencement of trading on the following Thursday (assuming the Tuesday, Wednesday and Thursday are all trading days).

7 Note that while ASX does not automatically purge orders in securities that are placed into a trading halt from the ASX trading platform, some market participants do purge such orders from their order systems as a precautionary measure, in case the information released during the trading halt affects the price or value of the securities in question. Also, if the announcement that is made by an entity to lift a trading halt in its securities results in a change in the basis of quotation of those securities, orders will be purged from the ASX trading platform before trading resumes to reflect that change.

8 The ASIC Market Integrity Rules (Competition in Exchange Markets) 2011 define a trading suspension as “a halt or suspension in trading on a Market pursuant to the exercise of a power by a Market Operator under its Operating Rules during which Orders may not be matched or executed on the relevant Market, but does not include a halt or suspension caused by a technical problem (including a power outage) affecting a Market Operator’s Trading System.” It therefore includes a trading halt imposed under Listing Rule 17.1 and ASX Operating Rule 3301(b), a voluntary suspension imposed under Listing Rule 17.2 and ASX Operating Rule 3300, a halt to trading imposed by ASX on receipt of a market sensitive announcement under Operating Rule 3301(a), and a regulatory halt imposed by ASX under ASX Operating Rule Procedure 3200.

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As a matter of practice, whenever ASX imposes a trading halt in a security under Listing Rule 17.1, it generally also imposes a trading halt in any ASX or ASX 24 exchange-traded options and contracts for difference relating to that security.9

It is this feature of a trading halt – the fact that it prevents trading in ASX-quoted securities and related derivatives on the main licensed markets in Australia where they trade – that makes it such an important and effective tool for managing the risks associated with a listed entity’s continuous disclosure obligations under Listing Rule 3.1.

3.3 When to ask for a trading halt

An entity should consider requesting a trading halt whenever it is necessary to manage its continuous disclosure obligations under Listing Rules 3.1-3.1B and to avoid trading in its securities happening on a basis that is not reasonably informed. Typically, this will arise where a listed entity has become aware of information that a reasonable person would expect to have a material effect on the price or value of its securities but it is not in a position to make an announcement about the information to the market promptly and without delay.

Having regard to the general principle outlined in section 2 above, a trading halt will generally only be granted for the period ASX considers reasonably necessary for an entity to manage its continuous disclosure obligations. A trading halt can therefore be quite short, including for a single trading day or part of a trading day.

Guidance Note 8 Continuous Disclosure: Listing Rules 3.1 – 3.1B has quite detailed guidance on when and how to use a trading halt for these purposes. The following are some specific examples of situations when an entity could consider requesting a trading halt and how ASX would be likely to respond to such a request:

Example 1: entity A, whose principal asset is a mine in a remote region, has just learnt that its mine has been hit by a major earthquake. Early reports indicate that the damage is significant. A intends to fly a team of experts to the mine to assess the damage but it is likely to take 48 hours for them to reach the mine and report back to A and then for A to prepare an appropriate announcement to the market about the extent of the damage and its likely impact on A’s operations.

It would be appropriate for A at that point to request a trading halt pending that announcement. The request for the trading halt, which would be released to the market, should mention that A’s mine has been significantly damaged by the earthquake, that A is sending a team to assess the damage and that a further announcement about the damage is anticipated within 48 hours.

In this case, ASX would likely grant a trading halt that covers the 48 hour period A says it needs to assess the damage and make an announcement to the market.

Example 2: entity B is in the final stages of confidential negotiations with C regarding the purchase of a material mining tenement. Speculation emerges in the media about the transaction that is reasonably specific and detailed, and the price of B’s securities starts to rise. ASX contacts B to ascertain if the speculation is correct or if B is aware of any other reason for the increase in the price of its securities. Upon being told of the purchase negotiations, ASX suggests that B needs to make an announcement to the market about the transaction, as it no longer appears to be confidential and therefore is no longer within Listing Rule 3.1A. B anticipates being able to conclude the negotiations with C and make an announcement about the transaction to the market within the next two trading days.

B considers that it would be appropriate to request a trading halt to allow it to complete the negotiations with C and to make a more definitive and informative announcement to the market about the concluded transaction than to give an immediate announcement about the current state of the negotiations. B’s request for the trading halt, which would be released to the market, should mention that B is in negotiations with C regarding a material acquisition of the tenement in question and that B expects to make an announcement about the conclusion of the negotiations within the next two trading days.

9 If a security is in a trading halt on the expiry date for an exchange-traded option over that security, ASX may open trading in the option for a short period to allow option holders to close out or roll their option positions.

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In this case, ASX would likely grant a trading halt for two trading days.

Example 3: entity D is conducting a bookbuild process as part of a significant issue of securities,12 where a reasonable person would expect information about the issue, including in particular the price at which the bookbuild is completed, to have a material effect on the price or value of D’s securities and where trading in D’s securities pending an announcement of that information would be happening on a basis that is not reasonably informed. The bookbuild process is scheduled to take place over the course of one trading day and overnight, with an announcement about the results scheduled to be made before the beginning of trading on the following trading day.

It would be appropriate for D to request a trading halt to allow it to conclude the bookbuild process and make an announcement to the market about the results. The request for the trading halt, which would be released to the market, should mention details of the proposed issue and the timetable for the conclusion of the bookbuild and the announcement to the market.

In this case, ASX would likely grant a trading halt for the one trading day needed to conclude the bookbuild process.

As mentioned previously, a trading halt can only be granted for a maximum period of two trading days. If it is anticipated that trading in an entity’s securities will need to be halted for a longer period in order for the entity to manage its continuous disclosure obligations, the appropriate course is for the entity to request a voluntary suspension rather than a trading halt.

In certain exceptional circumstances, ASX may consider a request by an entity to grant a ‘back-to-back’ trading halt. This would have the effect of extending a trading halt from a maximum of two trading days to a maximum of four trading days. What constitutes ‘exceptional’ circumstances will depend on the facts of each case and entities should seek guidance from their home branch. Factors that would be taken into account by ASX in considering such a request include the essentially short-term nature of the trading halt mechanism and the different treatment for trading halts and suspensions in the ASX trading platform.

To date, ASX has only permitted back-to-back trading halts for issues of securities that:

are significant in the context of the entity’s issued capital;

are essentially pro rata to all holders (eg an accelerated offering conducted in two stages, such as a ‘jumbo’ offer); and

involve the use of a bookbuild process and require a halt in trading of more than two, but not more than four, trading days to be implemented.

3.4 The procedure to ask for a trading halt

An entity should contact its home branch to request a trading halt. The request may be verbal or in writing but, in either case, must include the information required by Listing Rule 17.1, that is:

the entity’s reasons for the trading halt;14

how long it wants the trading halt to last;

the event it expects to happen that will end the trading halt; and

12 A similar example would be a listed entity facilitating a bookbuild process for a sale by a major shareholder of a significant stake in the entity, where a reasonable person would expect information about the sale, including in particular the price at which the bookbuild is completed, to have a material effect on the price or value of the entity’s securities and where trading in those securities pending an announcement of that information would be happening on a basis that is not reasonably informed.

14 By way of example, an acceptable reason for a trading halt may be a pending material announcement about a proposed capital raising, acquisition/disposal, merger/takeover or change in earnings guidance.

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that it is not aware of any reason why the trading halt should not be granted.

If the initial request is not in writing, it must be confirmed in writing and include the information set out above.15

Having regard to the general principle outlined in in section 2 above, ASX needs to be satisfied that a trading halt requested by an entity is required for it to manage its continuous disclosure obligations. A statement to the effect that an announcement is imminent will not suffice for this purpose. The general nature of the announcement must also be disclosed to ASX and included in the written request, or in the written confirmation of a verbal request, for the trading halt.16

Before agreeing to a request for a trading halt, ASX may ask the entity for further information including (but not limited to) its reasons for the trading halt, why it is not able to make an immediate announcement to the market that would avoid the need for a trading halt, the event it expects to happen that will end the trading halt and the likely timing and certainty of that event. In an appropriate case, ASX may also explore with an entity whether an announcement about the prospect and likelihood of an event occurring ought to be made immediately rather than deferring the announcement until there is certainty as to whether that event does or does not occur. In such a case, a trading halt may not be required or ASX may agree to a short trading halt to allow time for an appropriate announcement to be prepared.17

ASX will consider a request for a trading halt in light of all the information available, from whatever source, and the general principle outlined in section 2 above. ASX may not agree to the request if, for instance, it is not satisfied that a trading halt is necessary for the entity to manage its disclosure obligations. If ASX does not agree to the trading halt, it will advise the entity immediately. It will also discuss alternatives with the entity, which may include an immediate market announcement (coupled with a short trading halt if that is needed for the entity to make such an announcement) or a suspension (voluntary or otherwise).

Having regard to the general principle outlined in section 2 above, ASX will not agree to a trading halt where the request is made solely for the administrative or marketing convenience of an entity.

3.5 Notification of a trading halt

If ASX agrees to a trading halt, the entity’s written request, or the written confirmation of its verbal request, for the trading halt will be published on the ASX Market Announcements Platform. An announcement about the trading halt will also be made over the ASX voiceline service.

3.6 Ending a trading halt

ASX may end a trading halt at any time.18 It will usually do so once the entity makes the announcement about the event it said would result in the lifting of the trading halt, without any further action on the part of the entity.

In this regard, once the situation that led the entity to request a trading halt has been resolved or clarified sufficiently for the entity to be able to make an announcement that informs the market about the relevant matters, the entity is expected to make such an announcement immediately. This applies even if the period for the trading halt granted by ASX has not fully expired.

If for any reason the entity is not in a position to make such an announcement before the expiry of the trading halt, the entity should contact ASX to discuss how the situation should be handled. Some times this may involve

15 Listing Rule 17.1 provides that ASX may require a request for a trading halt to be in writing. In practice, ASX will act upon a verbal request from an entity for an urgent trading halt but will require the request to be confirmed in writing as soon as practicable thereafter. Generally, this request should be made by the person appointed by the entity under Listing Rule 12.6 to be responsible for communications with ASX in relation to Listing Rule matters. Where that person is not available, however, ASX will accept a request from any director or other officer of the entity for a trading halt.

16 See note 14 above.

17 In these circumstances, if the entity indicates that it does not intend to request a trading halt and/or to make an announcement of the type suggested by ASX, ASX may suspend trading in its securities until it issues the suggested announcement.

18 Listing Rule 17.7.

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the entity making an announcement updating the market on the current state of affairs before the trading halt has expired and trading in its securities then recommencing after the announcement has been made. Other times, it may be appropriate for the entity to ask for a voluntary suspension under Listing Rule 17.2 (see below) to allow more time for the situation to unfold.

If the situation is not resolved to ASX’s satisfaction before the expiry of the trading halt, ASX may have little choice but to consider suspending quotation of the entity’s securities under Listing Rule 17.3.

4. Voluntary suspensions

4.1 What is a voluntary suspension?

The expression “voluntary suspension” refers to a suspension of a listed entity’s securities from quotation requested by the entity under Listing Rule 17.2.

Listing Rule 17.2 states:

ASX may at any time suspend an entity’s securities, or a class of them, from quotation at the request of the entity. ASX may require the request to be in writing. ASX is not required to act on the entity’s request. The entity must tell ASX each of the following.

Its reasons for the suspension.

How long it expects the suspension to last.

The event it expects to happen that will end the suspension.

That it is not aware of any reason why its securities should not be suspended.

Any other information necessary to inform the market about the suspension, or that ASX asks for.

ASX Operating Rule 3300 states:

If Cash Market Products are suspended from quotation or trading the market for those products will be suspended and the products may only be traded with the written permission of ASX. At the termination of the period of suspension trading will proceed as specified in the Procedures.

ASX Operating Rule Procedure 3300 states:

At the termination of the period of suspension, trading in the Cash Market Products which are the subject of the suspension proceeds to Open Session State after a period of Pre-Notice Received Session State.

Again, the “open session state” refers to the state that the ASX market platform operates in during normal trading, where overlapping buy orders and sell orders are matched in accordance with price/time priority. The “pre-notice received session state” refers to the state that the ASX market platform operates in after ASX has received a market sensitive announcement (discussed in section 6 below). When a security is in that state, ASX market participants are able to place, amend or cancel orders for, but are not able to trade in, the security . This allows the order book to fill and supply and demand to emerge.

4.2 The effect of a voluntary suspension

When ASX agrees to a voluntary suspension in an entity’s securities under Listing Rule 17.2, those securities are placed into the “suspend state” on the ASX market platform. In that state, ASX market participants are not able to place orders for, or trade in, the securities. Any existing orders for the securities in the ASX trading platform are automatically purged. This treatment reflects the longer term nature of a suspension compared to a trading halt.

Again, under Part 6.1 of the ASIC Market Integrity Rules (Competition in Exchange Markets) 2011, whenever ASX places a security into, or takes it out of, a trading suspension, it is required to notify that action to all other

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licensed market operators in Australia who quote the security and they in turn are required to immediately take corresponding action to place the security into, or take it out of, a trading suspension.19

As a matter of practice, whenever ASX suspends trading in a security, it generally also suspends trading in any ASX or ASX 24 exchange-traded options and contracts for difference relating to that security.20

Again, it is this feature of a voluntary suspension – the fact that it prevents trading in ASX-quoted securities and related derivatives on the main licensed markets in Australia where they trade – that makes it such an important and effective tool for managing the risks associated with a listed entity’s continuous disclosure obligations under Listing Rule 3.1.

4.3 When to ask for a voluntary suspension

An entity should consider requesting a voluntary suspension:

whenever it is necessary to manage its continuous disclosure obligations under Listing Rules 3.1-3.1B and to avoid trading in its securities happening on a basis that is not reasonably informed; and

where it anticipates not being able to make an announcement to satisfy those obligations for a longer period than the maximum permitted duration of a trading halt (generally two trading days or, in those exceptional circumstances where ASX agrees to grant back-to-back trading halts, four trading days).

An entity should also consider requesting a voluntary suspension if it has been in a trading halt pending an announcement and it becomes clear that it will not be in a position to make the anticipated announcement before the end of the trading halt.

Entities should be aware that one of the conditions of their eligibility:

to offer securities without a disclosure document or product disclosure statement under a ‘low -doc’ rights issue (sections 708AA or 1012DAA of the Corporations Act) or under a share or interest purchase plan (ASIC Class Order 09/425); or

to rely on the ‘cleansing notice’ provisions in relation to a secondary sale of securities issued without a disclosure document or product disclosure statement under a placement (sections 708A(5) or 1012DA(5) of the Corporations Act),

is that their securities have not been suspended for more than a total of five days during the shorter of the period during which the class of securities was quoted, and the 12 month period before the relevant offer or issue.22 A voluntary suspension with therefore eat into this five day period.

Aside from this one issue,23 a voluntary suspension should not be perceived as a less attractive option for managing continuous disclosure obligations than a trading halt. The statement to the market advising of a voluntary suspension will clearly indicate that it has been put in place at the entity’s request and set out the reason for the request.

A voluntary suspension will generally only be granted for the period ASX considers reasonably necessary for an entity to manage its continuous disclosure obligations.


20 If the quotation of a security is suspended on the expiry date for an exchange traded option over that security, ASX may open trading in the option for a short period to allow option holders to close out or roll their option positions.

22 See ASIC Regulatory Guide 173 Disclosure for on sale of securities and other financial products for guidance on when ASIC will consider granting case-by-case relief in relation to secondary sales when an entity’s securities have been suspended for more than five days.

23 The concerns that once applied to voluntary suspensions that they might result in a loss of the ability to issue a transaction specific prospectus no longer apply (see ASIC Regulatory Guide 66 Transaction Specific Disclosure).

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In certain exceptional circumstances, ASX may agree to suspend quotation of an entity’s securities (or maintain an existing suspension) notwithstanding that the entity may be in a position to make an announcement about its progress in an incomplete proposal or negotiation that reasonably informs the market as to the current status of the proposal or negotiation. The circumstances in which ASX will consider agreeing to this course of action wil l generally be limited to situations in which the entity is reasonably of the view, and ASX is satisfied, that reinstatement of trading in its securities is likely to be materially prejudicial to the entity’s ability to successfully complete a complex transaction that is, or series of interdependent transactions that are, critical to the entity’s continued financial viability.

In such a case, ASX will require the entity to provide the disclosure required under Listing Rule 17.2, including setting out its reasons for the suspension (or continued suspension) and a proposed timetable for reinstatement of trading, and for that information to be released to the market.

ASX is unlikely to agree to such a request if a reasonable timeframe for completion of the proposal or negotiation cannot be estimated.

4.4 The procedure to ask for a voluntary suspension

The procedure for requesting a voluntary suspension and the factors that ASX takes into account in considering such a request are essentially the same as those outlined above in relation to trading halts.

As with requests for trading halts, an entity should contact its home branch to request a voluntary suspension. The request may be verbal or in writing but, in either case, must include the information required by Listing Rule 17.2, that is:

its reasons for the suspension;24

how long it expects the suspension to last;

the event it expects to happen that will end the suspension;

that it is not aware of any reason why its securities should not be suspended; and

any other information necessary to inform the market about the suspension, or that ASX asks for.

If the initial request is not in writing, it must be confirmed in writing and include the information set out above.25

Before agreeing to a request for a voluntary suspension, ASX may ask the entity for further information, including (but not limited to) its reasons for the suspension, why it is not able to make an immediate announcement to the market that would avoid the need for a suspension, the event it expects to happen that will end the suspension and the likely timing and certainty of that event.

4.5 Notification of a voluntary suspension

If ASX agrees to a voluntary suspension, the entity’s written request, or the written confirmation of its verbal request, for the suspension will be published on the ASX Market Announcements Platform. An announcement about the suspension will also be made over the ASX voiceline service.


25 Listing Rule 17.2 provides that ASX may require a request for a voluntary suspension to be in writing. In practice, ASX will act upon a verbal request from an entity for an urgent suspension but will require the request to be confirmed in writing as soon as practicable thereafter. Generally, this request should be made by the person appointed by the entity under Listing Rule 12.6 to be responsible for communications with ASX in relation to Listing Rule matters. Where that person is not available, however, ASX will accept a request from any director or other officer of the entity for a voluntary suspension.

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4.6 Ending a voluntary suspension

ASX may end a voluntary suspension at any time.26 It will usually do so once the entity makes the announcement about the event it said would result in the lifting of the suspension, without the need for the entity to take any further action on its part.

Again, once the situation that led the entity to request a suspension has been resolved or clarified sufficiently for the entity to be able to make an announcement that informs the market about the relevant matters, the entity is expected to make such an announcement immediately.

If for any reason an entity is not in a position to make the announcement about the event it said would result in the lifting of the suspension within the time that it originally anticipated, the entity is expected to make an announcement to inform the market of the reasons for the delay, and the new date by which it expects the suspension to be able to be lifted.

5. Dual listed entities

A dual listed entity (ie, an entity listed on ASX and on another exchange or exchanges) which requests and is given a trading halt or voluntary suspension on ASX to manage its disclosure obligations will need to consider carefully whether it should be taking similar action in relation to the other exchange or exchanges on which it is listed to prevent its securities trading there on an uninformed basis.

If another exchange on which it is listed permits a disclosure-related trading halt or voluntary suspension and there is a possibility of its securities trading on that exchange while ASX is in a trading halt or voluntary suspension, it will generally be appropriate for the entity to request that exchange to grant an equivalent halt or suspension to ASX. It is the responsibility of the entity to co-ordinate the application and lifting of that halt or suspension with its halt or suspension on ASX.

Not all exchanges, however, are as accommodating as ASX when it comes to granting disclosure-related trading halts and voluntary suspensions. If an entity’s securities will be trading on another exchange while they are in a trading halt or voluntary suspension on ASX and the entity is not able to obtain an equivalent halt or suspension on that exchange, it may be appropriate for it to publish a notice to that exchange indicating that an announcement is pending and investors should be wary of buying or selling securities ahead of that announcement.

Likewise, a dual listed entity which requests and is given a trading halt or voluntary suspension on another exchange to manage its disclosure obligations for a period during which ASX is also trading will need to contact ASX to request an equivalent trading halt or voluntary suspension to prevent its securities trading on ASX on an uninformed basis. Again, it is the responsibility of the entity to co-ordinate the application and lifting of the halt or suspension on ASX with its halt or suspension on the other exchange.

6. Halts imposed by ASX on receipt of market sensitive announcements

Under ASX Operating Rule 3301(a), ASX may implement a halt to trading in an entity’s securities if it receives an announcement from or about the entity which it considers to be market sensitive.

If the announcement relates to a takeover offer by or for, or a scheme of arrangement involving, the entity, the halt will last for approximately one hour. In all other cases, the halt will last for approximately 10 minutes. The purpose of the halt is to allow the market to absorb and react to the information in the announcement. Trading will then resume in the normal way without the entity being required to take any action. This procedure is described more fully in Guidance Note 14 ASX Market Announcements Platform.

Where ASX implements a halt to trading in securities under ASX Operating Rule 3301(a), the securities are placed into a “pre-notice received session state” on the ASX market platform. In that state, ASX market


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participants are able to place orders for, but are not able to trade in, the securities. Existing orders for the securities in the ASX trading platform are not automatically purged, as they are in the case of a voluntary suspension, but instead remain in the trading platform with the same price/time priority and are available for execution when trading resumes after the halt has been lifted.27 ASX market participants are also able to amend or cancel their existing orders.

Again, under Part 6.1 of the ASIC Market Integrity Rules (Competition in Exchange Markets) 2011, whenever ASX places a security into, or takes it out of, a halt to trading under ASX Operating Rule 3301(a), it is required to notify that action to all other licensed market operators in Australia who quote the security and they in turn are required to immediately take corresponding action to place the security into, or take it out of, a trading halt.28

As a matter of practice, whenever ASX imposes a trading halt in a security under ASX Operating Rule 3301(a), it generally also imposes a trading halt in any ASX or ASX 24 exchange-traded options and contracts for difference relating to that security.

7. Regulatory halts imposed by ASX in cases of extreme trading

ASX Operating Rule Procedure 3200 imposes volatility controls to regulate extreme movements in the price of securities trading on the ASX market. Under that procedure, trades occurring in the “extreme cancellation range” are subject to cancellation. This range is calculated based on a reference price, which will typically be the first traded price for that day or the price resulting from any subsequent intra-day auction.

ASX is required to impose a “regulatory halt” to trading in securities for at least one minute if any trades take place (or, but for the application of certain anomalous order entry controls would otherwise take place) in the extreme cancellation range.29 If ASX does impose a regulatory halt, those securities are placed into a “regulatory halt session state” on the ASX market platform. This has the same practical effect as the “pre-notice received session state” mentioned above. Thereafter, an intra-day auction is held, similar to the opening and closing auction. This process allows the market to draw pause after an extreme price movement and for supply and demand to return to the market. It also allows a new equilibrium price for the securities to be set in the auction, which in turn will re-set the reference price for the extreme cancellation range.

Again, under Part 6.1 of the ASIC Market Integrity Rules (Competition in Exchange Markets) 2011, whenever ASX places a security into, or takes it out of, a regulatory halt under ASX Operating Rule Procedure 3200, it is required to notify that action to all other licensed market operators in Australia who quote the security and they in turn are required to immediately take corresponding action to place the security into, or take it out of, a trading halt.30

As a matter of practice, whenever ASX imposes a regulatory halt in a security under ASX Operating Rule Procedure 3200, it generally also imposes a trading halt in any ASX or ASX 24 exchange-traded options and contracts for difference relating to that security for the period of the regulatory halt and the following intra-day auction.

27 Note again that while ASX does not automatically purge orders in securities that are subject to a halt in trading halt under ASX Operating Rule 3301(a) from the ASX trading platform, some market participants do purge such orders from their order systems as a precautionary measure, in case the information released during the halt affects the price or value of the securities in question.


29 ASX will not apply a regulatory halt session state where any part of the regulatory halt session state would otherwise be applied during the pre-closing share price auction or closing share price auction session states.




8. Continuing obligations

It should be noted that even though trading in an entity’s securities may be subject to a trading halt or suspended, the entity is still required to comply with all of its obligations under the Listing Rules.31 This includes its disclosure obligations under Listing Rules 3.1-3.1B.

Guidance Note 8 Continuous Disclosure: Listing Rules 3.1 – 3.1B has further guidance on how ASX approaches this issue.


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